Navigating the Data: Morgan Consult & Advisory's Industry Insight on June 2023 Construction Trends

The latest statistical bulletin released by the Office for National Statistics (ONS) sheds light on the current state of the construction industry in Great Britain as of June 2023. For professionals in the construction sector, this data provides valuable insights into the recent performance of the industry, new orders, and price indices, offering a perspective that can inform decision-making and strategy.

Construction Output in June 2023: A Positive Rebound

In June 2023, the construction industry in Great Britain witnessed a noteworthy upswing. Monthly construction output, in volume terms, surged by 1.6%, marking a significant rebound from three consecutive months of decline. This increase is particularly significant as it represents the highest level of construction output (£15,620 million) since records began in January 2010. This remarkable resurgence can be attributed, in part, to favourable weather conditions, with the Met Office confirming that June 2023 was the warmest month since 1884.

Notably, this growth was not limited to a single sector but was a collective effort. Six out of the nine sectors within the construction industry saw a rise in June 2023. This points to a broad-based recovery, suggesting that the industry as a whole is on an upward trajectory.

Quarterly Growth and the Role of Repair and Maintenance

Moving beyond monthly data, the quarterly performance of the construction sector also provides essential insights. In Quarter 2 (April to June) 2023, construction output increased by 0.3% compared to the previous quarter. While this growth might seem modest, it's crucial to recognise that the quarterly increase was driven entirely by repair and maintenance work, which expanded by 0.9%. In contrast, new work saw a slight decrease of 0.1%.

This data indicates that maintaining and enhancing existing structures played a pivotal role in driving overall growth during this period. This trend emphasises the importance of both new construction projects and the maintenance and renovation of existing infrastructure to sustain the industry's positive momentum.

New Orders: Challenges and Opportunities

On the front of new orders, Quarter 2, 2023 presented some challenges. Total construction new orders experienced a 7.1% (£786 million) decrease compared to the previous quarter, primarily due to significant declines in public other new orders (down 32.9%) and infrastructure new orders (down 26.5%).

These figures suggest that certain sectors within the construction industry may be facing headwinds. Factors such as uncertainty in commercially sensitive sectors, a slowdown in government contracts for traditional heavy infrastructure (like rail and road), and the cost-of-living crisis are likely contributing to these challenges.

However, it's not all gloom and doom. Amid these challenges, opportunities are emerging. Private commercial new work saw a substantial increase of 14.3%, providing a beacon of hope and indicating that diversifying into different construction sectors might be a wise strategic move.

Construction Output Price Indices (OPIs): A Consideration

Finally, the Construction Output Price Indices (OPIs) offer insights into the cost dynamics of the construction industry. In the 12 months to June 2023, the annual rate of construction output price growth was 4.6%, showing a slowdown from the record annual price growth observed in May 2022 (10.4%). This deceleration may have implications for budgeting and project cost management, highlighting the need for careful financial planning.

Morgan Consult & Advisory Ltd has reviewed the latest data and stands ready to assist you in navigating the ever-evolving construction industry landscape. Our services offerings can provide you with valuable insights, strategic guidance, and innovative solutions to address challenges and capitalise on opportunities. To learn more about how we can support your construction endeavours, visit www.morganconsultadvisory.co.uk.

In conclusion, the latest data from the Office for National Statistics provides a nuanced view of the construction industry in Great Britain in June 2023. Industry professionals should consider these insights carefully when making strategic decisions. While challenges exist, the rebound in construction output, particularly in repair and maintenance, demonstrates resilience and opportunities for growth, especially in sectors showing positive momentum. Construction professionals should remain vigilant, adaptable, and well-prepared to navigate the evolving landscape of the industry.